NZ Oil & Gas (NZO)

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Originally Posted by Nita

I hope i havent killed off what has been a pretty good discussion and thoughts while i have been relaxing on a tropical island the last few days. I would like some feedback or thoughts from digger, SC, Shasta etc on my previous post. Like in any good discussion one needs to ask all types of questions even if it challenges or questions your own judgement.

The initial response why they sold PPP was to some efect help reduce debt and possibly help in an aquisition. However i ask myself that if i was in the same shoes would i have done the same for the same reason? I keep coming up with no, except they think that PPP had reached a premium price. Apart from that i just dont buy into any of the other arguments.

discl. Have held NZO for 5 years although have 70% of my NZO and OD portfilio this year.

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Hi Nita

NOG had to sell PPP to get some cash. They were in a very poor cash position before they sold the shares.

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Originally Posted by Onthemoney

Hi Nita

NOG had to sell PPP to get some cash. They were in a very poor cash position before they sold the shares.

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OTM

Totally agree, NZO did not wish to exercise the PPP options, & at a time where they had little cash, & selling the PPP shares would mean they didnt need to tap into there loan facility money (setup for Tui & Kupe).

NZO do have cash now (& did have), but the difference being it wasn't "available" for use.

Like the situation we have at present - over $30m in the bank, but during the last quarter NZO drewdown $5m for working capital, because $25m of there cash holding has already been earmarked for Pike.

Nita - I hope that clarifies your query.

thanks for that. the commitment to Pike seems to have been premature then. although as a substantial holder of Pike they must have needed to make that commitment to appease the bankers.

i guess no different to many own peoples personal finances... need to rob peter to pay Paul

Nita,come to the AGM and ask that question. See you their.

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Originally Posted by digger

Nita,come to the AGM and ask that question. See you their.

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Are you referring to the question of why did NZO sell their PPP? I agree that they may not have been in an ideal position to fund their options but i still dont agree with Shasta and OTM that they needed the cash. They sold about a week prior to June 30th if i am not mistaken so it would like for the profit/loss statement. In less than 2 weeks from the time they sold Tui was pumping. Forward contracts of Tui was sold by Mitsui so cashflow was almost at the point that that NZO sold their shares. That is the reason for my question. Perhaps NZO needed to come up with money by June 30th but with caskflow iminent from Tui i just dont buy it. There may be 100 plus reasons for them selling when they did and most likely i will never know the real reason as they have pretty well covered themselves.

Will i attend the AGM? I would love to but i have other commitemtns that will have me out of the country at the time.

What i have been saying is not to detract from what DS is doing as i belive his efforts will be well rewarded for the shareholders. I have maintained for some time that i was never a fan of TR but since i was from Taranaki myself i know that DS is a pure bred (unless he was from south of New Plymouth). Seriously though i like his approach so far and hope it continues.

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Originally Posted by arjay

Quarterly out - I see they've dumped the Felix prospect.

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per crown minerals felix is in play for mid 2008




NZOG sets ambitious exploration and growth targets
19 October 2007 - Wellington-based, New Zealand Oil & Gas, has laid out an ambitious exploration spending plan, and reserves and production growth targets in its 2007 annual report.
The rise in spending will follow the big increase in cash flow it has started to receive from the Tui oil field.

Chief executive officer David Salisbury says the company plans to spend around $25 million on exploration in the 2008 financial year.

He says that NZOG has set an “ambitious growth target” of increasing its current reserves from 14 million barrels of proved and probable (2P) reserves to 25 million barrels by 2012.

The company is also targeting to double production to two million barrels a year by 2012.

The nearshore North Taranaki Felix oil prospect, which NZOG operates has been recently upgraded after new seismic data. Drilling is planned around mid 2008.

The Kupe gas condensate offshore field in which NZOG is a partner (and where production drilling starts inside two months) will also see the planned Momoho-1 exploration well drilled in the second quarter of 2008.

Mr Salisbury says NZOG is also building an inventory of new exploration opportunities, seeking fresh exploration acreage, and is on the look-out for acquisition opportunities.

A key priority has been to recruit further experienced staff capable of realising NZOG’s growth strategy.

Recently a number of people have been appointed to the positions of chief geophysicist, staff geoscience co-ordinator, reservoir engineering manager, public affairs manager, commercial manager and legal counsel.

At current oil prices and exchange rates, NZOG’s share of Tui revenues over the 2008 financial year is expected to exceed $100 million.

The additional 15% upgrade in Tui reserves to 32 million barrels would at current prices deliver NZOG approximately $50 million in additional revenues with only minor costs.



Last updated 18 October 2007



m

Lucky your market was on holiday yesterday and missed the knee jerk reaction to the drop in the DOW on friday. NZO did rather well on a small turnover down 1.5%. NWE went down 18.8% and AED 13.8%. The DOW is up at the moment so you might miss out on the drop.
Question are the shares now cheaper to buy in AUSTRALIA even with the exchange rate difference or will your sp drop or theirs rise straight away?. Macdunk

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Originally Posted by duncan macgregor

Lucky your market was on holiday yesterday and missed the knee jerk reaction to the drop in the DOW on friday. NZO did rather well on a small turnover down 1.5%. NWE went down 18.8% and AED 13.8%. The DOW is up at the moment so you might miss out on the drop.
Question are the shares now cheaper to buy in AUSTRALIA even with the exchange rate difference or will your sp drop or theirs rise straight away?. Macdunk

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Macdunk, this is relatively constructive post for you on this thread, well done! Lets hope it continues this way.

I would say that NZO will drop about !% in NZ and rise about !% in Australia today to get back to near level. C-MON noggers give out your prediction before the market opens. That would be more interesting than waffling on about PEAK OIL surely. Macdunk

107
Sorry I cheated :D:D

This stock has 12000 odd shareholders and many of them dont understand that NZO has just about booked in annual revenues of over $NZ100 million per annum for the next 15-20 years,....

Until they do the sp could go anywhere,...but when they do the sp will go well north of where it is now. We will see some retraction today but with sausage rolls being served at both the PRC AGM tomorrow and at the NZO AGM on Friday I would expect a lift and a continual lift as the Kupe drilling gets nearer.

PS you picked on NWE and AED being down substantially.They were hit by news of reduced production and sand problems.Not really fair of you to include them as part of the sell off..

No such problems with Tui

Quote:

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Originally Posted by Nita

Are you referring to the question of why did NZO sell their PPP? I agree that they may not have been in an ideal position to fund their options but i still dont agree with Shasta and OTM that they needed the cash. They sold about a week prior to June 30th if i am not mistaken so it would like for the profit/loss statement. In less than 2 weeks from the time they sold Tui was pumping. Forward contracts of Tui was sold by Mitsui so cashflow was almost at the point that that NZO sold their shares. That is the reason for my question. Perhaps NZO needed to come up with money by June 30th but with caskflow iminent from Tui i just dont buy it. There may be 100 plus reasons for them selling when they did and most likely i will never know the real reason as they have pretty well covered themselves.

Will i attend the AGM? I would love to but i have other commitemtns that will have me out of the country at the time.

What i have been saying is not to detract from what DS is doing as i belive his efforts will be well rewarded for the shareholders. I have maintained for some time that i was never a fan of TR but since i was from Taranaki myself i know that DS is a pure bred (unless he was from south of New Plymouth). Seriously though i like his approach so far and hope it continues.

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Hi Nita

Sorry I have been referring to the first block of shares they sold a few years ago.... Not any before Tui....

Tough rock drives costs up
By MARTA STEEMAN - The Press | Thursday, 25 October 2007

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Tunnelling the Pike River coalmine has proved more difficult than expected, Pike River Coal's shareholders were told yesterday at the firm's inaugural annual meeting.


"In fact, based on tunnelling experience to date we now expect nearly all the tunnel to be in the more expensive rock classes, rather than a maximum of 40 per cent," managing director Gordon Ward told about 70 shareholders at the meeting, which was held at the mine site.

The 2300-metre tunnel to the coal seam was 71% complete with 666m to go. Pike River Coal (PRC) expected to hit the coal seam next April 30.

That was about a month later than previously forecast although there was still potential for more slippage of one to three months, Ward said.

Last month, PRC said it had approved an $11 million increase for the extra tunnelling costs taking the approved budget to $185m, excluding a working capital budget of $33m.

Since July 2005, $105m had been spent on the underground mine development. The mine is in the Paparoa Range, 46km north of Greymouth with the access road cutting through Department of Conservation land. PRC raised $85m in an issue of shares to the public in July. Overall, the benefit of higher coal prices was expected to more than offset the increased mine development costs, Ward said yesterday.

Pike was poised to reap the benefit of an expected jump in hard coking coal prices next year. China and India were big influences on the price. For the first time China had become a net importer of thermal and coking coal.

Ward said market commentators were expecting premium hard coking coal – the type PRC would produce – to sell about $US120-125 a tonne from next April, compared to the current price of $US96.

Construction of the $19.2m coal preparation plant was expected to start at the end of the month and be completed in May next year in time for the first processing of coal.

Production in the first 12 months to April 2009 was forecast to be 240,000 tonnes building to 1m tonnes in the following year.

In the next six months the company would recruit 50 staff.

The company was looking at options to transport the first coal exports of about 60,000 tonnes next year. A possibility was by rail to Lyttelton Port.

Transport by two purpose-built vessels from Greymouth to Taranaki for export from there was being finalised by the West Coast Coal Consortium, Ward said.

Ward told shareholders coal exports were to be exempt from the Government's carbon emissions trading scheme.

Once the mine was running at full capacity, PRC's mine would be the fourth largest employer in the Grey District and would spend about $35m a year in the local economy on labour, services, power and transport.

Looks like they may be giving away free Tui down on the Naki.

STOCK EXCHANGE ANNOUNCEMENT

24 October 2007

Taranaki Basin incident

AWE Ltd, as operator of the Tui Area Oil Project, has been informed by New
Zealand authorities that degraded oil, in the form of tar balls, has washed
up on a stretch of beach on the country's Taranaki coast.
AWE is working closely with New Zealand authorities, including Maritime New
Zealand and the Taranaki Regional Council, to identify the nature and source
of the oil.
AWE, has been asked for and supplied, a sample of Tui crude to Maritime New
Zealand for analysis and comparison with the degraded oil washed up on the
coast.
Taranaki Regional Council, which is co-ordinating the cleaning of the beach,
has collected approximately six cubic metres of oil contaminated sand,
understood to be the majority of the affected area.
The Tui area oil project lies approximately 60 km from the affected Taranaki
coastline.

Six cubic metres is a big spill to big to be a little accident so someone will pay a hefty fine. The sp will take a tumble making a good buying opportunity the moment we know who spilled what. They are a little unlucky with wind direction, that points to it being a TUI spill. The winds have been gale force west to south west with huge seas. Hope its proved that they are not the culprits, but who knows at this point. Get ready to buy in at under a dollar, might make a decent trade next week. Macdunk

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Originally Posted by duncan macgregor

Six cubic metres is a big spill .... Macdunk

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They've removed 6 cubic m of contaminated sand, not to say that it was a spill of 6 cubic metres. Thats about a truckload of sand they've removed. Not good news... but no reason to think it was anything but a small spill....

I am out until the investigation results ann, just minimizing risk.

maybe perfect timing as my funds will be in my new NZ ASB account next week sub $1 NZO sounds good to me and maybe a top up in PPP- 100k to be invested

Quote:

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Originally Posted by Ripping

They've removed 6 cubic m of contaminated sand, not to say that it was a spill of 6 cubic metres. Thats about a truckload of sand they've removed. Not good news... but no reason to think it was anything but a small spill....

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6 cu metres of contaminated sand found on one one area of beach 60 km from the source suggests a rather large amount of oil lost.

My two cents on this is that these tar balls are shipping discharge from one of the numerous vessels that enter the Taranaki Port.

Reminds me of the old days in Bermuda when the beautiful pink beaches were an illusion because when you went to stand on the sand you sunk down into black tarry oil that had been illegally discarged by ships in the area.The hotels and motels had bottles of drycleaning fluid to use to clean your feet.

The international maritime union got onto it as it was becoming a problem worldwide and within a couple of years the problem was almost eliminated by heavily fining those vessels owners.

Oil has its own 'DNA' (Nickel : vanadium ratio) and the culprits were easily found.

This oil could be from anywhere but the source should be found with a good bit of detective work. My pick would be from a vessel and not associated with Tui ( a very light crude oil).

However it could have come from one of the support vessels or from the FPSO but my pick is from something else.

You have to be an optimist otherwise the world could get very bleak.

It sure beats bleating on about PEAK OIL. Should make nzo a good trade next week i am picking. Macdunk

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Originally Posted by duncan macgregor

It sure beats bleating on about PEAK OIL. Should make nzo a good trade next week i am picking. Macdunk

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Hell, I thought that you would be down there with your bucket and spade. Another opportunity missed by the Macdunk man.

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Originally Posted by shane_m

I am out until the investigation results ann, just minimizing risk.

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Man are you easily spooked or what ? Wouldn,t surprise me if the operator (AWE) has insurance to cover such a hiccup but at this stage we don't even know where the "oil balls" came from, could be local cow cocky gave the Hilux an oil n grease and flushed it all down the creek, cow cockies are known for such antics

You guys on here totally crack me up... LOL

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Originally Posted by bermuda

My two cents on this is that these tar balls are shipping discharge from one of the numerous vessels that enter the Taranaki Port.

Reminds me of the old days in Bermuda when the beautiful pink beaches were an illusion because when you went to stand on the sand you sunk down into black tarry oil that had been illegally discarged by ships in the area.The hotels and motels had bottles of drycleaning fluid to use to clean your feet.

The international maritime union got onto it as it was becoming a problem worldwide and within a couple of years the problem was almost eliminated by heavily fining those vessels owners.

Oil has its own 'DNA' (Nickel : vanadium ratio) and the culprits were easily found.

This oil could be from anywhere but the source should be found with a good bit of detective work. My pick would be from a vessel and not associated with Tui ( a very light crude oil).

However it could have come from one of the support vessels or from the FPSO but my pick is from something else.

You have to be an optimist otherwise the world could get very bleak.

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I am with you on this Bermuda. People jump to conclusions on issues such as this one and without all the facts start pointing fingers :mad:

Tar balls on the beach can also be a natural phenomena ....eg Huntington Beach California has tar balls regularly and it is all because of the very shallow oil deposits.

In the same area a small oil slick was seen from the air and immediately the platform operator was accused of spilling oil. $5million later .... ooops an earthquake had opened a small fissure and released a trace of oil.

Lets not be too hastie in coming to conclusions.

Taranaki oil spill exposes southern oceans risk: Greens
| Thursday, 25 October 2007

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Advertisement

AdvertisementGreens Party co-leader Jeanette Fitzsimons says a Taranaki oil spill should ring alarm bells in Government about the potential risks and costs of mooted oil exploration in the Great South Basin.


Work on cleaning up tar balls discovered on Tuesday on the Taranaki shore near Okato beach is continuing.

Taranaki Regional Council director of resource management Fred McLay said 10 workers had been working for two days to clean up the affected area.

Six cubic metres of oil contaminated sand had been collected and would be disposed of at a landfill, Mr McLay said.

Ms Fitzsimons said the risk of oil spillage from such explorations activities was real.

"The Taranaki contamination should be taken as wake-up call about what could happen on a far bigger scale, in a much more environmentally sensitive region in our southern oceans."

The Tui Area
.................................................. .................................................. ......................

If it was from Tui then the spill would have been significant to the point that AWE would already have been aware of it. Its more likely someone like Digger dumping his used oil in an attempt to get a cheaper entry price.

I have said it in the past and although only a slight posibility is the potential for seismic activity to cause problems. There has been quite a bit lately although not in the Taranaki region

looks like it was from tui. release been made on the asx.
-j

Quote:

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Originally Posted by jdg

looks like it was from tui. release been made on the asx.
-j

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Im celebrating guys, we obviously have so much oil flowing about, we can't handle it!

Seriously, what sort of fines & compensation are we up for?

Yes it now looks likely. At least that reported the day of the event. Should it have been released to the market at the time.The report to the Maritime should have been released to the market because we dont know the extent of the problem. I believe it should have as it appears to have had a slight impact on the SP especially with AWE. Also if any fines are imposed etc then again it could have an impact on the SP.

So it wasnt digger after all

looks like it was tui but that it was likely discharged by the umuroa as contaminated dischared water from the tui field. I mean i wish people read the entire ann before jumping to conclusions such as 6 cubic meters of oil as oposed to the 6 cubic meters of oily sand. Just if you comment on the ann announcing something make sure you have read the ann properly.

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Originally Posted by boysy

looks like it was tui but that it was likely discharged by the umuroa as contaminated dischared water from the tui field. .

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which announcement that you read carefully gave you this conclusion ?

on the asx AWEs latest announcement

Holy Moly.. Brent Crude hit $90 this morning!!!

Quote:

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Originally Posted by Dr_Who

Holy Moly.. Brent Crude hit $90 this morning!!!

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If it goes much higher it should be worth gathering tar balls

From stuff site ...



An oil slick washed up on Taranaki's coast looks likely to have come from the Tui oil field.

Australian Worldwide Exploration (AWE) media spokesman Ian Howarth, of Sydney, said the company had been advised the washed-up oil was similar to the oil produced from the Tui field.

AWE operates the Tui Area Oil project 50km off the Taranaki coast.

Mr Howarth said the analysis, done by the Taranaki Regional Council, was only preliminary and an investigation to directly link the oil to the Tui field was not complete.

A discharge of contaminated water early on Sunday from the Umuroa, a floating production, storage and offloading facility, could be responsible for the pollution.

"The incident occurred when the tanks were discharged.

"Normally only a portion of the water is discharged. On this occasion, the level in the tank was allowed to go down too far and some contaminated water was discharged into the sea."

Mr Howarth said the spill was reported to Maritime NZ on the day.

Exactly how much oil escaped was not known. "The fact of the matter is it should not have happened, if this is established as the cause."

AWE claims the incident is its first environmental blemish.

Sticky blobs of the tar-like oil have littered some of the coast's best surf breaks.

While there were no visible signs of any harm to wildlife yesterday, the pollution has angered locals. Adrian Fenton, New Plymouth, said he was shocked when he arrived to help clean up yesterday.

"The whole beach just reeked of oil."

Chris Daley said he was devastated when he saw the mess. Whoever was responsible for the spill should own up to what they had done.

Mr Howarth said substantial investigations were going on to find out what happened and how to stop it happening again.

AWE managing director Bruce Wood is expected to visit New Plymouth next week.

The sticky black goo was first spotted coming ashore on Tuesday night. By Wednesday morning, it had spread 10km from north of Kaihihi Rd, near Okato, to Paora Rd, near Puniho.

A three-day clean-up operation run by the TRC and costing more than $20,000 is expected to be completed today.

Maritime NZ marine pollution response team manager Nick Quinn said the chemical analysis of the oil was being done in Australia.

He hoped to have the results within seven working days.

Mr Quinn said it was too soon to say what penalties the culprit could face.

TRC compliance manager Bruce Pope said the clean-up was going well.

"We have got most of it, but we still have another day to go."

About six cubic metres of oil-contaminated sand has been removed from the beach.

it will be an interesting few days in the market for AWE, NZO, PPP. They all dropped on the ASX by roughly similar ammounts yesterday. PPP by 4.3%, AWE by 4.1% and NZO by 3.3%. Now that the greenies are jumping up and down it looks like further downtrends have to be expected. Thats the risk you take in the exploration and recovery game accidents must happen especially out in rough seas in gale force winds where you couldnt drink a glass of water without spilling the lot. It might be only a drop in the bucket, but its a major disaster for the oil industry in NZ with this greenie govt making the rules. Its another nail in the coffin for the options i expect pass the parcel will speed up now that the music is louder. Macdunk

Macdunk i think we should invent an "Best share bagging advice" award for the Auckland sharetrader meeting and im sure with almost unanimous certainty you would be front runner for this award with your continuiois pass the parcel rhetoric about NZOODs. Will be great to see the man in the flesh at the gathering though thats for sure.

Could be just a storm in a tea cup. This is not a major incident although bad enough for the locals. There may be a fine but the project supports locals. Just lessons to be learned so it doesn't happen again. My thoughts anyways.

6 cubic meters of sand. so, a chunk 2 meters wide by 3 meters long by 1 meter deep

probably a couple of trailer loads?

sweet **** all, compared to the millions of cubiic meters of sand on any given beach

with this oil spill ....what is the worst that could happen.

Fine the companies involved say $100,000 and cost of the clean up say $50,000 ...peanuts!! Overreaction by Mr Market methinks

Madduck give it a break - you have made your point whatever it was !

from - NZO: Chairmans Address to 2007 Annual Meeting

"Share Options
The listed options in the company have currency until 30th June 2008. These
options were issued gratis to all shareholders in late 2005 and have an
exercise price of $1.50.
Some investors have asked whether the term or other conditions of these
options may be varied. At this stage, the Board has no such proposal. Having
said that, I assure you the directors are cognisant of the fact that the
exercise of a prior tranche of options brought a substantial sum of very
useful equity capital into the company in June 2005 and that share options
can be a valuable trading mechanism for certain investors.
The approximately 140 million options on issue represent a potential source
of significant funding for the Company and your directors recognise the
substantial opportunity that this can provide for the Company if, as
intended, we have the projects in place that justify that level of additional
capital raising.
Further, as I stated in my overview in the annual report,
*****your directors firmly intend that the value of NZOG is fully recognised in the marketplace ahead of June 2008." ********

never before has a stock been so discussed that has delivered so little to so many. this thing’s been tracking sideways for a good couple of years. i sold about a year ago at a price somewhere near where it is now. i can't see it making the option conversion price before the end of june. excluding exploration success, i simply can't see a trigger that would make it run. those still in the options are expecting the sp to be north of $1.60. i'm not sure if brave is the word for that... best of luck,

-j

Unispiring AGM in welly today.

Went to get a feel for the big brains on the board.......unimpressed.

1. Salisbury came off alright - good speaker but nothing visionary.

2. Radford appears more intent on keeping his own pockets filled to the brim - appears to think NZOGs profits are his personal entitlement (would love to see the coy justify his 2K per day consultancy not to mention additional bennies).

3. Meyer seems like a smug sonofabitch - looked very put out at having to answer q's from the lowly sharholders. Not a man I would trust at the helm of the remuneration committee tbh. I suspect he may have been a used car saleman in a previous life.

Cheap bastards didn't even lay on the sausie rolls! :p

Overall: I think I'll take a hit on my oppies and exit stage left.

Interesting post. Yes i agree with your thoughts on TR especially. However as sharholders we have and continue to let him get away with it. He has very little to offer apart from his best attibute and that is to prevent takeovers (if he wants to)

Im sure others will report soon but i was also hoping to see what their game plan is. Starting to sound very similar to Brent King and Viking. No clear direction and more hoping something good will fall in his lap. early days with DS though.

in a nutshell.. the dead wood needs to go and it will be up to the shareholders to get rid of them.

How did the vote on increasing Directors fees go? I would be dissapointed if, after telling shareholders that divies for them were out of the question until the CO repays debt, shareholders then went ahead and approved incresed payouts to Directors.

I have voted yes, give that man a pay rise!!! :D he deserves one.

Not a holder anymore though.

Kropotkin,

I don't know whether you were at the same meeting as me, but there were sausage rolls left over when I left.

And you couldn't be more wrong about Ray Meyer. Try dean of engineering at the University of Auckland, rather than used car salesman.

Quote:

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Originally Posted by arjay

How did the vote on increasing Directors fees go? I would be dissapointed if, after telling shareholders that divies for them were out of the question until the CO repays debt, shareholders then went ahead and approved incresed payouts to Directors.

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funny you should mention that..lambs to the slaughter with a few dissenters.

but in principle i agree with no divvy at the mo - shasta explained it much better than I ever can...

Quote:

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Originally Posted by Wiremu

Kropotkin,
I don't know whether you were at the same meeting as me, but there were sausage rolls left over when I left.
And you couldn't be more wrong about Ray Meyer. Try dean of engineering at the University of Auckland, rather than used car salesman.

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serves me right for leaving early haha

Meyer could have all the degrees in the world. Hell, he could be the Queen of Sheba. My impression (uninformed as it may be) is an of another stuffed shirt (big brained he may be) riding on the NZOG gravy train. I said he was smug not stupid.

Quote:

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Originally Posted by Kropotkin

funny you should mention that..lambs to the slaughter with a few dissenters.

but in principle i agree with no divvy at the mo - shasta explained it much better than I ever can...



serves me right for leaving early haha

Meyer could have all the degrees in the world. Hell, he could be the Queen of Sheba. My impression (uninformed as it may be) is an of another stuffed shirt (big brained he may be) riding on the NZOG gravy train. I said he was smug not stupid.

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The gravy train lasts until it runs out of oil or the gullable wake up to what is going on which ever comes first. I woke up to that halfway through the 2006 AGM got to the nearest ph and sold the lot. TR was bleeding the company then, nothing seems to have changed. they still treat the shareholders with the contempt they deserve. Macdunk

I must admit, Krop's post did shake me a lil, with such good products but so little movement in share price, is lookin grim (even with Oil prices) up .

Starting to have (more) doubts about the whole management group now.

Might sell on strength instead of thinkin long term. :/

first positive - the oil price is over $90

second positive - David S commented that he was very pleased with talent of the new people that he has bought into the NZO team in an environment in which good people are hard to get
The way forward, as DS sees it, is through exploration in the taranaki area - lets see if their luck with the drill bit improves

third positive - there was an unlimited supply of sausage roles

forth positive - it was a nice day in wellington

those who didn't make it didn't miss out on any new info - there was nothing reported that was not already known to the public.
,

Mick, did they say anything about the hedging, i.e. the calls and their expiry? (We know that
the puts run to 2010).

Quote:

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Originally Posted by sideline

Mick, did they say anything about the hedging, i.e. the calls and their expiry? (We know that
the puts run to 2010).

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Yes - TR gave quite a good explanation of the situation regarding hedging

Firstly, the calls were taken out to help pay the premium on the puts - ie NZO got paid for the calls which covered some of the cost of buying the puts - a wise move at the time IMO

As it turns out the puts are very unlikely to be exercised (unless oil falls below $50/bbl) however the calls that NZO sold look as though they will be exercised - some of them anyway (TR did say that no calls have been exercised so far, so obviously NZO have not sold oil for a price in excess of the call price which I thought was $85)
The good news is that the remaining calls add up to 100,000 bbls over the next three years. Even if oil prices continue increasing then only around 10% of the next three yrs production will have to be sold at the call price.

So absolutely no problems with hedging in my opinion
.

Having not gone to the meeting and listening to all the unanswered questions on this forum i presume the meeting was a raging success. I left halfway through the previous meeting and sold the lot knowing that management had greed and utter contempt for the shareholders. Listening to the people so far that have gone to this years Agm i notice a change of attitude by some of the brainwashed. Some of them i presume voted for management to get over the top wage rises. DID ANYONE STAND UP AND CALL THEM A BUNCH OF GREEDY BASTARDS. I would say not, so you lot can pay the piper, you deserve to hire him. Mick 100 states nothing new that wasnt known before at the meeting, which makes it a raging success against open disclosure. All the unanswered questions by a bunch of wimps who come home knowing nothing new about what their hard earned investment dollar is up to. The only hope you lot have is an increased sp, before you get out, the management will play for time. Macdunk

Quote:

---

Originally Posted by geezy

I must admit, Krop's post did shake me a lil, with such good products but so little movement in share price, is lookin grim (even with Oil prices) up .

Starting to have (more) doubts about the whole management group now.

Might sell on strength instead of thinkin long term. :/

---

As a shareholder on and off in this company for most of its life, be very wary. I too was warned many years ago by my peers and later on posters on this site about investing in this company and the lack of respect for its owners the shareholders.

I stood up for it but in later years have changed my tune when I realised why the price reacts why it does. Be very aware and wary!!!!

As an aside you do not want this company to be paying divis until they accumulate imputation credits.

Quote:

---

Originally Posted by duncan macgregor

The gravy train lasts until it runs out of oil or the gullable wake up to what is going on which ever comes first. I woke up to that halfway through the 2006 AGM got to the nearest ph and sold the lot. TR was bleeding the company then, nothing seems to have changed. they still treat the shareholders with the contempt they deserve. Macdunk

---

Yeah I have wondered about TR and saw Salisbury and thought great. But am now wondering how far TRs hand is up his rear to control the puppet as he seems to be re-enacting some of the comments of the 90s.

give TR a break guys, he deserves a pay rise. definitely worth more than 2k a day.

I would be more worried about the oil spill, and clean up cost. hence I got out after reading the oil spill ann two times.

Quote:

---

Originally Posted by shane_m

give TR a break guys, he deserves a pay rise. definitely worth more than 2k a day.

---

Great stuff - definitely deserves a rise look at his performance over the past 2 decades... I wouldn't turn up for less than 2k a day....

Quote:

---

Originally Posted by Mick100

first positive - the oil price is over $90

second positive - David S commented that he was very pleased with talent of the new people that he has bought into the NZO team in an environment in which good people are hard to get
The way forward, as DS sees it, is through exploration in the taranaki area - lets see if their luck with the drill bit improves

third positive - there was an unlimited supply of sausage roles

forth positive - it was a nice day in wellington

those who didn't make it didn't miss out on any new info - there was nothing reported that was not already known to the public.
,

---

Must have some incredible talent there now, who edged me out of the Finance job there for a start? :mad:

Could have sorted the PR in me lunchtime :D

Nice to see someone focus on the positives from the meeting.

Why on earth people are expecting a company that 6 months ago was technically still an "explorer", & 4 months after first oil, is now a mature dividend paying producer, is just plain crazy!:confused:

TR stepped down as he said he would, so lets not be having a go at him personally.

Like it or not, NZO have finally delivered & had TR not fought tooth & nail against GPG (?) in the early days, NZO wouldnt be around today...

Granted the market hasn't woken up to NZO yet, good i say.

Those that don't like the setup....exit stage left, right even!

Those that believe in NZO & it's future - it's a cheap producer & not without risk, look back in 2 years time & see how far we've come.

Lets look back at the years highlights...

1. Tui first oil - Discovery to production in around 4 years (& the fastest payback period?)

2. Pike River "PRC" - Dual listed (not without delays & cashflow problems)

3. Kupe - Finance sorted, gas sale contract altered, drilling program ahead

4. New Management (TR stepping down) - new era?

5. Put/Call options - smart play by NZO, limiting the downside & now sitting pretty with the POO.

Wish i could have been there today, but alas work committments...

just got back from wellington. Thanks for all the comments but would like to add some points.
All the share bonuses to the staff should be looked at. Roughtly it means they get the right to take up the options two years after they join the company at 20% above the price they were when they joined the company or 20% above the price when they agreed to take up the rights.
{Helen tells me that in the US staff get these options for no capital outlay.}
So if theses options are issued today at 1dollar they will have to be 1-20 when exercised.

I have to accept the hedging policy in place to satisfy bank lending policy but i have it from several directors that hedging will be kept to a minium in the future.
Agree that there should be no dividend until imputation credits are available,and also until the other two projects are at or very near production.At that stage i will be prepared to lead a lunch mod if more shares are issued to staff if no dividend is paid to shareholders.

Krokopin- you were not at the AGM so stop commenting; the food was fine but I was impressed with David Salisbury; TR usual dulect tones.

Quote:

---

Originally Posted by digger

just got back from wellington. Thanks for all the comments but would like to add some points.
All the share bonuses to the staff should be looked at. Roughtly it means they get the right to take up the options two years after they join the company at 20% above the price they were when they joined the company or 20% above the price when they agreed to take up the rights.
{Helen tells me that in the US staff get these options for no capital outlay.}
So if theses options are issued today at 1dollar they will have to be 1-20 when exercised.

.

---

thanks for explaining that digger
that looks fair enough
When they said "partially paid shares" I assumed they were going to be heavily discounted, ie a give away
.

Quote:

---

Originally Posted by digger

just got back from wellington. Thanks for all the comments but would like to add some points.
All the share bonuses to the staff should be looked at. Roughtly it means they get the right to take up the options two years after they join the company at 20% above the price they were when they joined the company or 20% above the price when they agreed to take up the rights.
{Helen tells me that in the US staff get these options for no capital outlay.}
So if theses options are issued today at 1dollar they will have to be 1-20 when exercised.

I have to accept the hedging policy in place to satisfy bank lending policy but i have it from several directors that hedging will be kept to a minium in the future.
Agree that there should be no dividend until imputation credits are available,and also until the other two projects are at or very near production.At that stage i will be prepared to lead a lunch mod if more shares are issued to staff if no dividend is paid to shareholders.

---

Thanks digger et al for your observations from the AGM . Are you sure you mean lunch mod and not
lynch mob??
Mick, partially paid means they have to pay 1c per share now to reserve the right to later take them up.
At uptake they have to pay the difference i.e. if the are offered at 20% over today's price they'll have to
fork out another $1.23 at uptake. Only after that do they become fully paid shares and can be sold on the market.

From what i have figured so far with the share option plan for employees is they are getting free cracks of the cherry imo. By that i mean that as incentives so to speak they can purchase these various options at reletively low price compared the the current SP at the time. There are a sway of options available at around the 41.00 to $1.10 mark. This is significantly lower than the 20% that digger has mentioned if you read the NZX release when they come out.

What does all this mean. NZO is probably no different to most other listed companies where imo the strike rates or incentives are too easliy attained. This is biggest gripe but it wont do us any good if only the odd person complains about it. In effect we are paying for mediocrity. It could be worse. You only have to look at many of the spec assie mining stocks to realise that most NZ companies arent too bad.

Although i wasnt at thge meeting i am growing to dislike TR more and more every day. I sort of expected that DS is a puppet to TR by the looks of today my fears are not easing. If someone wants to put their heart and soul into a company then reard them for their effort but TR has his fingers in a lot of pies and since he is based in Aus i dont see how he is being efficient for NZO. His family will do very well out of his legacy.

Im sure the oil spill was mentioned today and since AWE acknoweledeged there was an incident on the 21st I wonder how significant it was. was the question asked and if so what was the reply?

Although i am a holder i cant help but get the feeling the pong is getting stronger.

ill be holding nzo till the day digger sells his shares.

me and the old mans cash in this company for 3 years now, has pretty much been flatlined.


a dissapointment? you bet

in the past 3 years, they have got tui into production , ipo'ed the coal

i tink that aint too shady for the company IMO

share price wise = shocking

company's projects = good work.

lets hope the share price will catch up some day...

Those of you who didnt see NZ herald article

NZOG expects $100m from Tui
5:00AM Saturday October 27, 2007

New Zealand Oil and Gas (NZOG) is expecting its oil revenues from the Tui area in offshore Taranaki to top $100 million this financial year.

Chief executive David Salisbury told NZOG's annual meeting in Wellington yesterday that production from Tui had averaged about 40,000 barrels a day since oil began flowing on July 30.

Some technical modifications were needed to reach the 50,000 barrels a day target, which the company expected to achieve during November.

NZOG has a 12.5 per cent interest in the Tui area, from which 2.5 million barrels of oil have so far been shipped.

About 60km from the coast, the Tui Area Oil Project, operated by AWE, is being investigated as the possible source of oil that washed up on a Taranaki beach.

About 6cu m of contaminated sand has been removed from the beach.

Salisbury said the oil produced from Tui was a high quality sweet, light crude, but so far the amount of money earned from it was commercially sensitive.

During the September quarter NZOG had received US$7.5 million cash from Tui, he said.

Forward revenue predictions were difficult, but a useful rule of thumb was that each barrel of oil earned roughly $100, Salisbury said.

With NZOG's share of production this financial year expected to be about 1.2 million barrels, the company expected its revenue from Tui to comfortably exceed $100 million in 2007-08.

Developed proved and probable reserves for the Tui area were put at 32 million barrels, with project operator AWE carrying out a study which would include evaluation of the economic potential of undeveloped reserves.

NZOG chairman Tony Radford said the cash flow being generated from Tui this financial year was earmarked in part to repay much of the bank loan NZOG used as the primary source of funding for the development.

The company also needed to meet its other operational costs and to be able to provide financial support , if needed, to the development of the Pike River Coal mine on the West Coast, of which NZOG now owns around 31 per cent, following an $85 million public equity raising.

NZOG's other major investment is a 15 per cent interest in the Kupe gas and condensate field development, also in offshore Taranaki, where first production is due in mid-2009.


Salisbury said NZOG's share of the Kupe development costs up to the beginning of October was about $50 million which was met from general sources of funding.

Remaining development costs were being funded through a $125 million debt facility with Westpac Bank.

He acknowledged the company had "recent disappointments" with the overseas Taranaki Hector, Taranui and Tieke exploration wells.

NZOG's current exploration portfolio was not as strong as the company would like. It remained committed to pursuing attractive exploration opportunities, both within its existing acreage portfolio in the Taranaki region, and elsewhere, Salisbury said.

Taranaki alone would not provide sufficient future opportunities for NZOG, and the company believed New Zealand had good remaining prospectivity for oil and gas.

NZOG was also looking at specific acquisition opportunities but could not yet talk about those.

"The economics for NZOG of exploring in New Zealand remain very good," he said. "New Zealand continues to be under-explored. Worldwide the hunt for acreage is on - yet New Zealand is still largely off people's radar screens.

"But we know that New Zealand has active hydrocarbon systems. There are eight identified basins, but only Taranaki has seen any significant exploration."

Salisbury said the company had been through a "transformational" period, with production beginning at Tui and the long-awaited float of coal mine Pike River.

NZOG shares closed down 1c at $1.04 yesterday, having ranged between $1.34 and 86c in the past year.

- NZPA

Tui tips

* The Tui Oil development is located off Taranaki.

* It was discovered three years ago.

* Oil began flowing on July 30.

* NZOG has a 12.5 per cent interest in the development.

* It intends to lift production from about 40,000 barrels a day to 50,000.

Quote:

---

Originally Posted by tim23

Krokopin- you were not at the AGM so stop commenting; the food was fine but I was impressed with David Salisbury; TR usual dulect tones.

---

I had no idea someone was tracking my every move...:p

Quick! Tell everyone where I'm a going to be monday lunchtime!

Clearly you missed by further comment about leaving early - had $ to make rather than listen to TRs ramblings.

I stand by my comments - you don't have to pay attention.

Kropotkin,

If you object so much to the two directors you have made disparaging remarks about, why didn't you vote against their re-appointment.

Oh I forgot, then you couldn't hide behind anominity.

Quote:

---

Originally Posted by Wiremu

Kropotkin,

If you object so much to the two directors you have made disparaging remarks about, why didn't you vote against their re-appointment.

Oh I forgot, then you couldn't hide behind anominity.

---

He probabely did what i did at the previous years meeting, walk out half way through In disgust. When you listen to what i listened to i knew to vote with my cheque book, no point upsetting the starry eyed brigade. I do notice that even some of the companies greatest supporters starting to wake up to the reality of what is going on. Never mind only eight months to go in pass the parcel that should upset a few apple carts. All those questions you lot wanted answers to what a bunch of wimps to come back none the wiser. Macdunk

Macdunc,

Is there a union of those who attend annual meetings and walk out half way through that you feel bound to answer for Kropo and in doing so repeat your great disappearing act of 2006 yet once more?

As for the reality of what's going on - I think Shasta has summed it up well:

1. Tui first oil - Discovery to production in around 4 years (& the fastest payback period?)

2. Pike River "PRC" - Dual listed (not without delays & cashflow problems)

3. Kupe - Finance sorted, gas sale contract altered, drilling program ahead

4. New Management (TR stepping down) - new era?

5. Put/Call options - smart play by NZO, limiting the downside & now sitting pretty with the POO.

Bit unfair on Kropotkin are some of you.

He has given his/her opinion and i most agree. As long as he/she doesnt play the smae record day after day then i am not sure what the problem is.

In all fairness i was unable to attend the AGM so i am have got some things wrong here.

Since most of us are shareholders here, how do you feel if money is easily given away through ESOP or through consultancy work (which can be a away to write your own cheque).

To me i have no problem with the way the company has deveopled ove rthe last couple of years. Cost blowouts are par for the course and will continue to be so. What i dont like is the way that the ESOP, other perks, consultancy work (not only to TR) is given out. Like it or not there is a lack of transparency. I hope i am wrong but Kropotkin looks to be pretty much OTM. If you disagree with his comments then lets debate what the issues are.

Feel very dissapointed now and one thing i do agree with DM is some are becoming blinded by reality.

Quote:

---

Originally Posted by Nita

Bit unfair on Kropotkin are some of you.

He has given his/her opinion and i most agree. As long as he/she doesnt play the smae record day after day then i am not sure what the problem is.

In all fairness i was unable to attend the AGM so i am have got some things wrong here.

Since most of us are shareholders here, how do you feel if money is easily given away through ESOP or through consultancy work (which can be a away to write your own cheque).

To me i have no problem with the way the company has deveopled ove rthe last couple of years. Cost blowouts are par for the course and will continue to be so. What i dont like is the way that the ESOP, other perks, consultancy work (not only to TR) is given out. Like it or not there is a lack of transparency. I hope i am wrong but Kropotkin looks to be pretty much OTM. If you disagree with his comments then lets debate what the issues are.

Feel very dissapointed now and one thing i do agree with DM is some are becoming blinded by reality.

---

I agree Nita

Krotopkin/Macdunk & others (not "Unbalanced" though) are allowed there pessimistic view on NZO, so long as it contains "factual" points & not ex - shareholder sour grapes, continually looking back into the past!

Whilst i'm optimistic about NZO's future, i'm fully aware of the inherent risks, ie, delays & costs blow outs etc...

BUT then, delays & costs blowouts are industry wide & all explorers/producers succumb to them, else get "lucky" to avoid them.

IMO, The biggest risk at present in the O&G game is securing drilling rigs for future exploration at "reasonable" costs.

In this regard NZO have done well, & have the drill here for the Kupe tie in gas prospects.

The O&G industry isn't for the risk intolerant, but can have HUGE upside on finding new commercial discoveries...

Thank you Nita + Shasta.
I'm glad you support my right to hold That I clearly stated was a personal opinion.

In no post have I said that NZOG does not have massive potential. What I have been clear on is my gut feeling for the men at the top.
If don't have a good feel for a company I wont invest - simple as that.
I intend to downsell based purely on this impression (not at all based on fundamentals) but by no means intend be to be a future "sour-graper".

Wiremu - I suggest you read the posts and hold a little less dogmatic viewpoint. It's tiresome.
For the record, I voted for the Salisbury's reappointment, abstained from the others, and voted against any additional remuneration - both for non-exec raise and employee option schemes.

I think you are confused; one minute you own the stock next minute you don't, why did you buy in the 1st place if you did your management assessment??

Duncan - can you tell us again about your experience at last years AGM; you will have RSI at the rate you rattle on - you are simply boring.

Quote:

---

Originally Posted by Kropotkin

Thank you Nita + Shasta.
I'm glad you support my right to hold That I clearly stated was a personal opinion.

In no post have I said that NZOG does not have massive potential. What I have been clear on is my gut feeling for the men at the top.
If don't have a good feel for a company I wont invest - simple as that.
I intend to downsell based purely on this impression (not at all based on fundamentals) but by no means intend be to be a future "sour-graper".

Wiremu - I suggest you read the posts and hold a little less dogmatic viewpoint. It's tiresome.
For the record, I voted for the Salisbury's reappointment, abstained from the others, and voted against any additional remuneration - both for non-exec raise and employee option schemes.

---

Regarding your comment about Ray Meyer ( a very talented man)

Probably what you meant to say was

" I shouldn't judge a book by its cover"

Could some who were at the AGM report on the positives or new information that we were not already on about. Perhaps by recent AGM's this one may have been a little flat. In the past there has been quite a bit of hype but often has been filled with a few dissapointments. Maybe this time around no real promises but a few nice surprises in store.

Was there any mention on how NZO hope to get the op's over the line? On a seperate not it is mentioned that DS said that they may have to go to the market for funding (for aquisition). this means that in the next 12 months or so we can expect further dilution. That is of concern to me.

I have already expressed my dissapointment on the AGM report and the feedback so far. I have yet to hear any poster say what it is that is going to propel this company to the next level. DS has left this area to general to convince me that he has a solid road map to get to his target. So where is the road map?

Been a holder for 4 plus years and have done reasonably well out of this stock. Plenty of potential ahead with some direction but no plan.. Time to sell.. Very soon for me imo. The only thing holding me in is the Kupe potential with possible explorations close to Tui.

Quote:

---

Originally Posted by Nita

Could some who were at the AGM report on the positives or new information that we were not already on about. Perhaps by recent AGM's this one may have been a little flat. In the past there has been quite a bit of hype but often has been filled with a few dissapointments. Maybe this time around no real promises but a few nice surprises in store.

Was there any mention on how NZO hope to get the op's over the line? On a seperate not it is mentioned that DS said that they may have to go to the market for funding (for aquisition). this means that in the next 12 months or so we can expect further dilution. That is of concern to me.

I have already expressed my dissapointment on the AGM report and the feedback so far. I have yet to hear any poster say what it is that is going to propel this company to the next level. DS has left this area to general to convince me that he has a solid road map to get to his target. So where is the road map?

Been a holder for 4 plus years and have done reasonably well out of this stock. Plenty of potential ahead with some direction but no plan.. Time to sell.. Very soon for me imo. The only thing holding me in is the Kupe potential with possible explorations close to Tui.

---

Nita

I did write a longish reply, but the site didnt like it & i lost it.

DS has stated as a priority to get the options converted & i believe its crucial for NZO's future success they do get it.

Go back & read from page 94, Boysy (among others) had a good summary of how NZO will get there.

Nita

The meeting was a fairly dreary, ho-hum affair - nothing was discussed that you are not already aware of
Not sure if people know - it sounds as though pike will be sold off once it's up and running
The company is going to focus on near field exploration in taranaki

nothing really to report

I have found that sometimes the best thing to do in a situation, as we find ourselves in with NZO at the moment, is to do nothing at all
I certainly won't be buying more shares but I'm not selling either.
.

My take on Pike is/was that NZO have been looking to sell Pike for quite some time. If im not mistaken is that NZO have a contract with at least one of the major stakeholder in Pike to see it through to a certain stage. This may have changed or i might have misread the "between the lines" comment a year or so ago.

One thing with NZO is i have more often that not got the short term sp wrong. If i was day trader i would have been killed ages ago. For that reason i will never think that the SP is certain to go a particular way. Ill leave that to the experts like Macdunk, Jo King and co

NITA, I dont know about JOEKING but macdunk got it wrong as well. However it taught me a lot about what to look for in a company served me really well with my trading in other companies. I feel sure TIM 23 will forgive me when i say the alarm went off at the 2006 AGM. I have never heard bullsh*t and waffle like it since my three year stint in the army.
I think once the nests get fully feathered there might be enough left to drill a few more holes in the ground before they ask for more money. Macdunk

Quote:

---

Originally Posted by tim23

I think you are confused; one minute you own the stock next minute you don't, why did you buy in the 1st place if you did your management assessment??

---

Dear oh dear! I shouldn't really bother but here goes.
Not quite sure where confusion should be apportioned here, but I have been quite clear that I own ops but intend to downsell at a little loss (already downsold my heads at a minor profit).

My initial assessment to purchase was based on what I saw as market potential.
My subsequent decision to sell is based on actually seeing the management face to face and how they present/respond to stockholders.
In short, I don't trust them to represent shareholder value. End of story.

If I lose out in the long ran bad luck for me. I won't be crying about it though.

Anyway, enough of this sidetracking. Back to the real stuff.
I think Mick100 + shasta covered off the actual news of the AGM pretty succinctly with the addition of:

a) actively look at onshore exploration
b) wouldn't speculate (for commercial reasons) about picking up assets being shed post govt carbon announcement

MacDunk - did you say anything at the 2005 AGM?

Oil bursts through another record
New 3:30PM Monday October 29, 2007

Oil prices set a new all-time high today, lifted by heightened tensions between Turkey and Kurdish rebels in northern Iraq, as well as a second wave of abductions in major oil producer Nigeria.

US light crude leapt more than half a dollar to a record US$92.43 in early electronic trade, adding to Friday's US$1.40 surge. It was trading up 52 cents at US$92.38 a barrel by midday (NZT).

London Brent crude rose 41 cents to US$89.10. It hit an all-time high of US$89.30 on Friday.

"There remain concerns that oil market conditions are tightening and geopolitical tensions are continuing to add a premium to oil prices," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
.................................................. .................................................. ...............

Can someone explain to me how the call options work with regards to NZO. I have bought call options before on the Aus futures and when i came in the money i really came in the money. Thoughts please

Quote:

---

Originally Posted by Nita

Oil bursts through another record
New 3:30PM Monday October 29, 2007

Oil prices set a new all-time high today, lifted by heightened tensions between Turkey and Kurdish rebels in northern Iraq, as well as a second wave of abductions in major oil producer Nigeria.

US light crude leapt more than half a dollar to a record US$92.43 in early electronic trade, adding to Friday's US$1.40 surge. It was trading up 52 cents at US$92.38 a barrel by midday (NZT).

London Brent crude rose 41 cents to US$89.10. It hit an all-time high of US$89.30 on Friday.

"There remain concerns that oil market conditions are tightening and geopolitical tensions are continuing to add a premium to oil prices," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.
.................................................. .................................................. ...............

Can someone explain to me how the call options work with regards to NZO. I have bought call options before on the Aus futures and when i came in the money i really came in the money. Thoughts please

---

Nita

Nzo sold calls
so when they come in the money NZO lose
only 100,000 bbls over the next three yrs though - so nothing to worry about
.

I exited NZOODs today... never like to agree with macdunk too much, but would have been a significant amount of pinger lost had the music stopped and I couldn't find a seat.
I was slightly worried at how many were traded in the 20-30c range a few months back, those punters will be off-loading at anything above current price in the next couple of months I reckon.

Now the decision to put it all back into NZO, or scope something else.....

I got out on the oil spill ann, waiting for the outcome. I reckon all oilers will get a re rating if turkey attacks PKK.

Quote:

---

Originally Posted by Mick100

Nita

Nzo sold calls
so when they come in the money NZO lose
only 100,000 bbls over the next three yrs though - so nothing to worry about
.

---

Mick, how much will this impact on their bottom line?

good article in the herald this morning talking about how TUIs oil helped our decrease our trade deficit last month

http://www.nzherald.co.nz/section/3/...ectid=10472869

Quote:

---

Originally Posted by Dr_Who

Mick, how much will this impact on their bottom line?

---

I'll have a go for you.


The company could have and should have answered this one properly when asked. Dismissive of the effect OK, but an explanation was requested and not provided. In any other forum I might have expected the Chair to ask the shareholder if the question was satisfactorily answered, particularly where it was a point where the company had everything to gain and nothing to lose, no reason to be seen to withhold info, no reason to race the meeting to a close having already got their bonus shares.

To me the answer required a $ figure put on it. It was answered by the CFO and he would have been very capable of putting a figure on it. My understanding is that NZO don’t “lose”. They only don’t get paid for the difference between ~USD85 and the oil price for 100,000 barrels spread over three years. The difference is unlikely to be over USD10 per barrel.

On the high side then, we are talking about USD1M over three years but remember that we are getting a decent return before this occurs.

Over that period NZO should sell in excess of 2.5M barrels and if it is priced over USD85 =USD212M. So much less than the 1pc - I think the reply was "less than 1pc" of revenue over the period.

(NZD110 at today’s exchange rate this would be NZD275M – sounds pretty good with Tui recovering NZO capitalisation within three years – the Tui operating costs were also low).

Thanks Bilo. :)

Why did NZO hedge the oil in the first place? Why bother with only such a small amount? It is a blessing that it was only a small contract compare to their overall output.

Dr Who ,NZO sold those calls to pay for the hedges(puts) required by the lenders.
Clearasmud

Quote:

---

Originally Posted by Dr_Who

Thanks Bilo. :)

Why did NZO hedge the oil in the first place? Why bother with only such a small amount? It is a blessing that it was only a small contract compare to their overall output.

---

Dr Who
NZOG had to borrow some money for the development of Tui. The Bankers in their wisdom insisted that the loan be protected in the event that the oil price collapsed. So NZOG had to takk out some hedging; some at the low end and some at the high end. When these loans get repaid the company wont have to renew its hedging...it probably would protect itself against a slide but leave the upwards price open ended. Ok now that the price is over $US86 they will lose a little cream on a few barrels but they could use it all up now and enjoy the $US150/bbl when that madman strikes Iran.

Tis no big deal or loss.

The JV partners must be enjoying this huge oil price.

I thought I explained this fairly well a couple of pages back but it seems some people still don't get it, except bermuda

if the oil price is above USD $86 then NZO lose the difference betweem $86 and whatever the oil price is - so if the oil price goes to $100, NZO lose $14/bbl on the hedged amount which is, as I have already said, 100,000 bbls over the next three yrs

put another way - NZO have sold forward 100,000 bbls at US $86. -
the amount of money NZO lose can't be determined because we don't know what the future oil price is going to be - NZO might not lose any money at all - if the oil price went to $200 tomorrow, then we lose $114/ bbl on 100,000 bbls
.

Sorry Mick100, I don’t see this price difference as a loss for NZO. I see this as NZO just not get the ultimate Cents of the profit.

Cheers
Bixbite

Quote:

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Originally Posted by Mick100

I thought I explained this fairly well a couple of pages back but it seems some people still don't get it, except bermuda

if the oil price is above USD $86 then NZO lose the difference betweem $86 and whatever the oil price is - so if the oil price goes to $100, NZO lose $14/bbl on the hedged amount which is, as I have already said, 100,000 bbls over the next three yrs

put another way - NZO have sold forward 100,000 bbls at US $86. -
the amount of money NZO lose can't be determined because we don't know what the future oil price is going to be - NZO might not lose any money at all - if the oil price went to $200 tomorrow, then we lose $114/ bbl on 100,000 bbls
.

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Mick
Maybe you should read a book or two on risk management. I hope that your house is insured.

Quote:

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Originally Posted by Toddy

Mick
Maybe you should read a book or two on risk management. I hope that your house is insured.

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What point are you trying to make?

Quote:

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Originally Posted by Toddy

If NOG locked sales in at the current oil price (forward contracts) then the SP would more than likely be rerated. If they gamble that the oil price will stay high then the NZO SP will continue to under perform others in the same industry.

Its simple. Lock in the cashflows please.

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This statment is looking rather dumb already
who in there right mind would want to lock in future oil prices at $75 / bbl
I'v watched on as two of my gold miners went bust because they sold forward future gold production at $400/oz. Problem is that costs keep going up and to top it off they didn't produce to the level expected so had to buy gold in the spot market at $650 to meet their forward sales

I know all about forward sales - they can be extremely risky, particuarly if there is a problem with production
Luckily NZO only have 100,000 bbls hedged
,

Quote:

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Originally Posted by Mick100

This statment is looking rather dumb already
who in there right mind would want to lock in future oil prices at $75 / bbl
I'v watched on as two of my gold miners went bust because they sold forward future gold production at $400/oz. Problem is that costs keep going up and to top it off they didn't produce to the level expected so had to buy gold in the spot market at $650 to meet their forward sales

I know all about forward sales - they can be extremely risky, particuarly if there is a problem with production
Luckily NZO only have 100,000 bbls hedged
,

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Mick

You sound a little upset about the prospect of management minimising risk and maximising value for shareholders. You should now be asking yourself why the NZO SP is what it is today and why institutional shareholders do not want a chunk of the NZO pie.

FYI, when hedging future cashflows you can hedge future income, expenses and capital expenditure.

Quote:

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Originally Posted by Toddy

Mick

You sound a little upset about the prospect of management minimising risk and maximising value for shareholders. You should now be asking yourself why the NZO SP is what it is today and why institutional shareholders do not want a chunk of the NZO pie.

FYI, when hedging future cashflows you can hedge future income, expenses and capital expenditure.

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Toddy, please enlighten us. I too would like to know why institutions are not buying into NZO.